If you’re in need of a pick me up, today’s guest will come to the rescue with his personality and product. Avi Markus is the president of BeOn Energy Gems. Dark chocolate energy supplements, packed with caffeine so you can skip those runs to Starbucks.
What’s exciting to me is that I tag you as my friend who’s a serial foodpreneur. Can you tell me, how did you get into this space?
Avi Markus: I did a business degree in Toronto and I initially took a very traditional route into Tier I CPG. So I worked at Unilever and then I moved over to Shoppers Drug Mart, which is one of Canada’s largest retailers and essentially kind of Walgreens in Canada. But I learned really quickly while being deeply involved with numerous quality package good companies, that I was really much more of an entrepreneur.
I made the decision to leave what was a very traditional and secure route. And I found myself a business partner and around 2007, I launched my first food brand, which was actually an organic loose leaf tea called nourishtea. And we grew it nationwide across key counts. And I learned really quickly that it wasn’t, that I was necessarily only in the tea category, but really what I was doing was entering this natural foods ecosystem. And I never looked back.
Sherri Langburt: And definitely ahead of the curve there, because you said 2007.
Avi Markus: Yeah, that’s true. Actually, when we launched nourishtea, it was essentially around the same time that tea was just starting to become more and more significant and prevalent in the marketplace. Teavana was growing and DAVIDsTEA out of Canada was growing. And what we wanted to do was really, provide a much more affordable and accessible route to organic loose leaf tea. So rather than spending X dollars for a tin of a hundred grams of organic rooibos, you can find it at your nearest drug store at Walmart. And it was really successful in that respect.
What other food ventures have you been involved with? Past, present future?
Avi Markus: So obviously as you know, I run a caffeine infused, dark chocolate energy product called BeOn, and this is really what I’ve been doing now for about five or six years. But after nourishtea was acquired in 2011 I think, completed the acquisition around 2013. And for a while I stayed involved, I actually took it to the Northeast of United States, but then I’ve kind of been involved with as an advisor consultant on a few different lines. I was involved with a protein bar and a stevia.
I am currently involved with the development of a toddler formula coming out from overseas into the North American market. So I’ve kind of had my fingers in a few areas and the nice thing about the natural food space is that in many ways, like I said, it really is an ecosystem and the skills and the network is really transferable. So it enables you to kind of, or rather it enabled me to be involved in various.
What’s the most challenging part of being an entrepreneur and what’s the most rewarding part of being an entrepreneur?
Avi Markus: That is a great question. I think I never, I actually rephrase that. Actually, I have always really known inside that I’m much more of an entrepreneur and it’s a life- it’s not just a way of life in a way of conducting business, but it’s a decision on how you want to conduct your career. Going the traditional route is obviously provides you with certain benefits that I was willing to overlook. I don’t think I could ever look back. I really enjoy what I do. It’s given me the ability to participate and be involved with numerous categories and numerous brands. And my network is vast and it’s been a lot of fun.
Sherri Langburt: I will say that people are like “Sherri, why do you work so many hours?”. And the truth is it’s people think, “Oh, you’re an entrepreneur. You’re working so many hours. Because that’s just the part of being an entrepreneur”. But I love what I do. When you create what you do, it’s hard not to love it, right?
Avi Markus: A hundred percent. You’re so right. And I’ll also tell you that once nourishtea was acquired, I had that fork in the road where I was really wondering if I should just go back to the traditional route. And I knew really, really quickly that I could not change the direction I’m on right now.
Tell me about BeOn. What’s the product line, the flavors, everything.
Avi Markus: BeOn is a caffeine infused dark chocolate product. It’s a Blommer dark chocolate. It’s a really beautiful product that for all intents and purposes, it’s kind of almost like an M&M on steroids in terms of what it looks like, but really, it’s not a candy it’s closer to a supplement. It’s got, it’s a vitamin infused BD complex, turmeric in the shell, dark chocolate caffeine infused with 133 milligrams of caffeine per serving. And the efficacy is really strong.
People who enjoy it, the feedback we receive is that they really get that caffeine boost that they’re looking for. I’ve been lucky to be involved with some lines that are really ahead of the curve. This is our own formulation. We created it about six, seven years ago. BeOn used to be called Energems where you found us in grocery and drug.
When I came on board, I kind of reformulated or reformatted, how we do business. We, the team rebranded the product as BeOn the idea is to be on your game. It’s a product that really resonates with the female demographic. And we do exceptionally well online. And I say that because this is the energy category. Traditionally it’s been really male skewed, but you’ll find us in hospitality, portions of convenience, and that being hospitals, airports, train stations, et cetera, you’ll find us in traditional tea stores, but where we really perform well is online.
What’s going on because of COVID with online, what has shifted for you from retail to online?
Avi Markus: Just like everyone else, I think that we were kind of a deer in headlights, so to speak when COVID hit, because we all had to reassess where our business is going. We had actually just gone through a real successful exercise of understanding our customers through data. So historically we had always been lucky enough to really dig deep into our data and understand who our customers are and where they are and what they do.
It’s tougher in retail to really get that understanding unless you’re acquiring the data. We had just gone through this exercise to determine really where we performed best, what parts of the store, what type of formats of stores, and then COVID hit. So suddenly retail took a dive and we’ve been fortunate that while retail took a dive, e-commerce improved.
We were up to three, maybe four X at one point. It’s obviously stabilized, just like it has for everybody, but we’ve reassessed. And now we are rebuilding our Amazon. We’ve created a storefront on Amazon and we are tearing down our subscription program on lovebeon.com, which I should mention as our website and we’re rebuilding it and now with different marketplaces, you’re going to find us on not just your LuckyVitamin and Walmart and Kroger Marketplace, which is launching shortly. We know where we perform well. And I would like us to put more and more resources into e-commerce.
I’m not an e-commerce person, but are you afraid of Amazon? What I hear from a lot of our partners is like, “Oh, we have a product. And now Amazon is copying us with a generic brand that they just put up there”. Is that of a concern to you?
Avi Markus: You know what? On the contrary. I am so very not afraid of Amazon. I think Amazon is, it isn’t Titanic. It’s a large animal that you have to learn how to operate within, but I’m really excited about what Amazon has provided for us right now, and for brands everywhere. I mean, if you think about what Amazon was 10 years ago today, we have really the tools.
First of all, I should also say that unlike many other brands, we really focus our attention on conversion as opposed to impressions. So we are less about getting as much visibility as possible. The way that we conduct our e-commerce is to convert as quickly as possible. And in order to do that, we have to really understand who our customers are and target them effectively. And there’s this perception that it’s hard to do that on Amazon.
Avi Markus: You need to do that through your own e-commerce platform. And what we are learning more and more is that the tools that are available to us today through Amazon really gives us that ability and that mobility. And it’s been for me, this has been as a brand person, I’m learning more and more about e-commerce and I’m so excited about the learnings I’m getting now. And Amazon is really giving us that high conversion ability through targeted ad spend. And yeah, so the shorter, I guess that’s the long answer. The short answer is that I think that we should be really leveraging Amazon much more than we are.
What percentage of your business pre COVID was coming from Amazon and post COVID? Well, during COVID, how much of a driver is Amazon for you?
Avi Markus: Before COVID, when you look at the multiple verticals and e-commerce, again, that would be our own subscription platform and then your marketplace, and then Amazon. Amazon was probably always 50 to 60% of our sales online. And if you think about it, that makes sense because customers, we are so trained to be comfortable with Amazon, we know where we’re paying.
We know it will be shipped on time. We know where we can track, it will never go down. There’s just a legitimacy and a comfort level with Amazon that’s immeasurable. So it’s in no way to me surprising that customers are more comfortable buying on Amazon than on our platform. Not that they shouldn’t, but just generally, and when you look at the data, it clearly comes through.
Sherri Langburt: Fascinating. I want to start learning more about this too. So I’m going to pick your brain in the future about everything that you’re learning. So one of the things we have in common is we are both Canadian, and I’m just fascinated also with the Canadian marketplace.
What is it like being a food marketer that does work in the US and international, but is based in Canada? What are the pros and cons of being in Canada?
Avi Markus: The Canadian market, I mean, it’s our backyard and it’s where I cut my teeth. And especially now during COVID, I mean, it goes without saying, because considering we can’t cross the border, but the market is finite. The reality is, is that for Canadian brands to really succeed in the grand scheme of things, I really believe that you have to kind of begin here in the Canadian market and understand it and learn and succeed, and then bring it over to the US market.
It’s obviously easier said than done, but what I have learned is that that is the root, that is the strongest, most logical route for growth and path to profitability. And let’s face it. There’s a path to profitability for small businesses in natural foods is hard to find, it’s not an easy route.
So if you are ready to, once you are well capitalized and you have the data to prove the units per store per week, it’s a lot easier to have that conversation in the US but it’s a big deal. And in regards to American brands coming to Canada, there is all sorts. Even though it’s a much smaller market in theory, it should be a territory.
There’s a lot of compliance you have to deal with, right? We are a bilingual country, so our packaging must be bilingual. And if you are a natural product or a supplement, you have to deal with Health Canada for registration. There are all sorts of intricacies and they all take time. And I think for that reason, you’ll find a lot of American brands stay away from Canada, or at least without putting too much resources into Canada until they really can determine it’s the right thing to do. And it goes both ways.
Sherri Langburt: It’s so frustrating. I think I’ve mentioned this to you in the past, because what I did work at Weight Watchers, I kind of championed that we would get the foods into Canada. And so many of them had never been in Canada and even the promo books and everything. And finally, we did it. So it’s frustrating that so many brands don’t do it, but what is amazing is that when Canadians finally get something like that, they’re so completely loyal because they just are so excited that they got it.
Avi Markus: You know, what’s interesting? If you look at the general planograms in grocery and drug, and they almost feel identical. And so the larger brands that have the wherewithal and the capital to play in both markets, I mean, that really comes through. I think, where we all lose as consumers is that the smaller brands where often it is really the exciting innovation, it’s, sometimes I’m down in New York or Florida, and I just see this brand, I wish we’d have on the shelf, and I’m sure, and I can tell you as a Canadian, that we have some incredible innovation here that unfortunately you might never get to the US market. And I hope they do.
What is some of that innovation coming from Canada?
Avi Markus: I think that you’re going to find it in baked goods and you’ll find it in beverages. There are some really wonderful protein bars here. Now, again, the protein bar category is massive and saturated, but everywhere you look, you’re finding some really great entrepreneurship here.
Expo West, the biggest natural food show. Were you supposed to be there this year? Because I know the cancellation was devastating and would love to get your thoughts on how it impacted the industry.
Avi Markus: We were all supposed to be there until the very last minute. I remember I was apprehensive to cancel my flight and then it all came crashing down on everybody. So I think it will be missed, but I think that we will all prevail and survive and Expo West is an exciting event and I think that in some shape or form, we all want to be there. I will say this as an entrepreneur, but also as the person who so to speak, “owns the brand”.
One thing I’ve learned about Expo West is if you are from the East, if you are from the Northeast or from Canada, until you’re ready to be at Expo West, you might not get the return that you’re looking for. Meaning that just showing up and just being there doesn’t necessarily give you what you’re looking for. I would highly suggest that if you’re preparing yourself Expo West, make sure that you have the proper infrastructure in place so that if business is conducted in a way that you suddenly have an opportunity that you have the manpower, you have the 3PL you have a distributor that you can name. I think that we’re all so excited to be there that sometimes we don’t prepare appropriately for it.
Sherri Langburt: Yeah. It’s massive. I remember not Expo West, but when I went to CES, it was so overwhelming. And it doesn’t help, that that one’s in Vegas.
Obviously Babbleboxx is an influencer marketing company. So tell me, I don’t know if you do, but what experience do you have working with influencers?
Avi Markus: That’s a really interesting story actually. To go back to what I was saying earlier that we are- the culture of our company has been much more about data and about conversion and a lot less more about impressions. So while we believe in the importance and the success rate of influencers, it wasn’t necessarily something that we had planned effectively for.
Then we had a really large opportunity about two, three years ago, an influencer approached us. And it was, I have to say without naming names, it was a big opportunity for us. And we went down the road. And what we learnt really quickly is that we had the influencer, the power of this influencer was so enormous, but it actually was not necessarily on brand so to speak. It wasn’t necessarily the route we would have gone.
It opened doors into it while we should have been focused predominantly on health and fitness. We suddenly found ourselves in arts and arts and culture and hip hop and et cetera. It was one of those learning experiences where we just all felt it was the wrong fit, both sides. So ultimately after about five, six months, we decided to sever relations. And in hindsight, I think it was the right decision because I think influencer marketing, for it to be effective, for you to get the return, it needs to be the right fit.
Sherri Langburt: Right. Well, it sounds like you made the right choice there.
Avi Markus: I think we did. I think we did. It would have been really exciting, but exciting doesn’t necessarily mean the right decision.
Why do you think for other brands, I know you’re not there yet, but in the natural food space, why do you think influencer marketing has been so critical?
Avi Markus: Again, if we think back a decade or so, natural foods was a lot less mainstream and today, especially today, and given COVID, if you think about it, we just really care about what we put in our bodies. We read labels, we want to talk about it. We want to share opinions. We want legitimacy. And I think influencers, good influencers, the strong ones, the legitimate ones. They provide us with that authority that I think we’re craving today. And I think it clearly shows that in the growth of the industry.
I’m going to end with my final question, which I ask everyone. name an influencer you love to follow, but hate to admit that you do?
Avi Markus: Okay. That’s a tough question. I’m actually going to say that- okay, well, let me back up a little bit. We know for certain who our customers are, and I can say that because if I look at our data, which I look at constantly, one thing that differentiates us, I think from other energy products is that we highly resonate with women. And I’m going to tell you a secret, which is obviously no longer a secret considering the airways that we’re on. We thought we were going to be 50-55% female, who purchased our product. And we are closer to the 80%.
Which is huge because this is a category that has been predominantly driven by beverages and shots. And now you’re starting to get into the mints and [inaudible 00:25:07], and chocolate. And we also obviously focus heavily on fitness. So I will tell you that I love Serena Williams. I think that she is a goddess. And I’d say that if I could have one influencer to represent BeOn it would be her.
Sherri Langburt: Maybe you should send her some product.
Avi Markus: You know what? I think I might.
Sherri Langburt: I’ll try to help you get her address. Well, thank you, Avi so much. It was so lovely to have you today and happy new year. It’s the Jewish High Holiday this week. So thanks for tuning in everyone. And we’ll speak to you soon.